The latest quarterly earnings reports from Exxon Mobil (XOM) and Chevron (CVX) have revealed disappointing results, with both companies missing expectations by over 40% compared to the previous year. Despite the negative news, there were still notable highlights. Chevron returned a record $20 billion to shareholders year-to-date, while Exxon Mobil returned $8.1 billion in the third quarter alone and increased its dividend to $0.95 per share.

Massive Deals Closed this Month

On top of the earnings reports, Exxon Mobil and Chevron have recently made significant deals that have consolidated their positions in the oil market. Exxon Mobil acquired Pioneer Natural Resources (PXD) for $59.5 billion, while Chevron bought Hess (HES) for $53 billion. These acquisitions have expanded Exxon Mobil’s exposure to the Permian Basin, the largest oil reserve in the US, and Chevron’s presence in Guyana, a booming offshore oilfield with 30 new discoveries since 2015. Chevron’s acquisition of Hess gives them a major foothold in the region.

These strategic deals by the energy giants contrast with the International Energy Agency’s (IEA) forecast that oil demand will peak by 2023. In fact, Chevron’s CEO, Mike Wirth, criticized the IEA, saying that they are not “remotely right” and that real-world demands require allocating capital accordingly.

Stock Performance

Investors may wonder which stock to choose between Exxon Mobil and Chevron. Over the past five years, both stocks have performed similarly, outpacing the sector and slightly surpassing the broader market. However, when considering a longer timeframe, Chevron has significantly outperformed Exxon Mobil. Chevron has compounded at an annual rate of 11.4% over the last 20 years, resulting in a total return of 795%. Meanwhile, Exxon Mobil has compounded at 9%, yielding a total return of 473%. Despite this historical outperformance, it remains uncertain whether Chevron will continue to outperform Exxon Mobil in the future.